Other things being equal, a rise in the domestic price level
A)raises the real burden of repaying a fixed money value debt.
B)causes a decrease in real saving.
C)makes domestic goods more attractive to foreigners.
D)makes foreign goods less attractive to domestic residents.
E)lowers the real value of all assets denominated in money units.

Question

Quizplus · Accepted Answer

A rise in the domestic price level leads to inflation, which decreases the purchasing power of money. This results in a lower real value of assets denominated in money units, as the same amount of money can now buy fewer goods and services.

Other Things Being Equal, a Rise in the Domestic Price